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Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include audit, management consultancy, tax consultancy, accounting services, secretarial services, etc.

Friday, March 15, 2013

Budget 2013-14: Amendment in Excise Duty

AMENDMENTS IN THE
CENTRAL EXCISE ACT, 1944:

1) Section 9 provides
that an offence case involving evasion in which the duty leviable exceeds
thirty lakh rupees shall be punishable with a term of imprisonment extending to
seven years with fine. This section is being amended so as to substitute the
amount of thirty lakh rupees with fifty lakh rupees. [Clause 78]

2) Section 9A is being
amended to make an offence cognizable and non-bailable where the duty liability
exceeds Rs.50 lakh and punishable under clause (b) or clause (bbbb) of
sub-section (1) of section 9. [Clause 79]

3) Section 11 is being
amended so as to provide for

(i) recovery of money
due to the Government from any person other than from whom money is due after
giving a proper notice, if that other person holds money for or on account of
the first person;

(ii) the other person to
whom such notice has been issued is bound to comply and (iii) if the other
person to whom the notice is served fails to comply, he shall face all the
consequences under this Act. [Clause 80]

4) Section 11A is being
amended to insert sub-section (7A) providing that service of a statement
containing details of duty not paid, short levied or erroneously refunded shall
be deemed to be a service of notice under sub-section (1) or (3) or (4) or (5)
of this section. [Clause 81]

5) Reference to
sub-section (1) in section 11DDA is being omitted. [Clause 82]

6) Section 20 is being
amended so as to make the provisions applicable only to offence which is
non-cognizable. [Clause 83]

7) Section 21 is being
amended so as to make the provisions regarding release of arrested person on
bail or personal bond applicable only to offence which is non-cognizable.
[Clause 84]

8) Clause (a) of section
23A is being amended to expand the definition of the term “activity” to include
any new business of production or manufacture proposed to be undertaken by the
existing producer or manufacturer. [Clause 85]

9) The existing
sub-section (2) of section 23C provides for the admissibility of application
for advance ruling, inter alia, for credit of excise duty paid or deemed to
have been paid. The scope of admissibility has been expanded to include credit
of service tax paid or deemed to have been paid on input services. [Clause 86]

10) Reference to section
28-I in section 23F is being substituted with section 23D. [Clause 87]

11) A new proviso is
being inserted in sub-section (2A) of section 35C so as to provide that in
cases where delay in disposing of the appeal is not attributable to the
appellant, the Tribunal may extend the period of stay by a period not exceeding
185 days subject to the condition that if the appeal is not disposed of within
the total period of 365 days from the date of order, the stay shall stand
vacated. [Clause 88]

12) Section 35D is being
amended to enhance the monetary limit of the Single Bench of the Tribunal to
hear and dispose of appeals from “ten lakh rupees” to “fifty lakh rupees”.
[Clause 89]

13) Section 37C is being
amended to specify additional modes of delivery of specified documents i.e. by
speed post with proof of delivery or through courier approved by the Central
Board of Excise & Customs. [Clause 90]

The changes at para 1)
will come into effect immediately owing to a declaration under the Provisional
Collection of Taxes Act, 1931. [Clause 92]

Proposals involving
changes in rates of duty

I. AGRICULTURE/AGRO
PROCESSING/PLANTATION SECTOR:

1) Full exemption from
excise duty is being provided on tapioca sago (sabudana) and tapioca starch
manufactured and consumed captively in the manufacture of tapioca sago.

2) Full exemption from
excise duty is being provided on henna powder or paste, not mixed with any
other ingredient.

II. AUTOMOBILES:

1) Excise duty on SUVs
is being increased from 27% to 30%.

2) Excise duty on truck
chassis (8706 00 42) is being reduced from 14% to 13%.

3) Sports Utility
Vehicles registered solely for use as taxis will not suffer additional excise
duty consequent to the increase in excise duty on SUVs from 27% to 30%. Taxi
refund in respect of SUVs is being adjusted accordingly.

III. METALS:

1) Excise duty of 4% is
being levied on silver manufactured from zinc/lead smelting.

2) Compounded levy on
stainless steel “Patta Patti” is being increased from Rs 30,000 per machine per
month to Rs 40,000 per machine per month.

3) It is being clarified
that the item “trimmed or untrimmed sheets or circles of copper intended for
use in the manufacture of handicrafts or utensils” presently leviable to excise
duty at Rs. 3500 per MT includes copper and copper alloys including brass.

IV. AIRCRAFTS &
SHIPS:

1) Full exemption from
excise duty is being provided on ships and other vessels. Consequently, there
will be no CVD on these ships and vessels when imported.

V. TEXTILES:

1) Full exemption from
excise duty is being provided on hand made carpets and carpets and other
textile floor coverings of coir or jute, whether or not handmade.

2) ‘Zero excise duty
route’, as existed prior to Budget 2011-12, is being restored in respect of
branded readymade garments and made ups. In the case of cotton there will be
zero duty at the fibre stage and, in the case of spun yarn of man made fibres,
there will be a duty of 12% at the fibre stage. The ‘Zero excise duty route’
will be in addition to the CENVAT route now available.

VI. HEALTH:

1) Branded Ayurvedic
medicaments and medicaments of Unani, Siddha, Homeopathic or bio-chemic system
are being brought under MRP based assessment with abatement of 35% from MRP.

VII.
ELECTRONICS/HARDWARE:

1) Excise duty on mobile
phones of retail sale price exceeding Rs 2000/- is being increased from 1% to
6%.

VIII. MISCELLANEOUS:

1) Excise duty on
cigarettes is being increased by about 18% on all cigarettes except cigarettes
of length not exceeding 65 mm. Cigars and cigarillos duty is also being
similarly raised.

2) Excise duty on marble
tiles and slabs is being increased from Rs 30 per sq. mtr to Rs 60 per sq. mtr.

3) Full exemption from
excise duty is being provided to intermediate goods manufactured and consumed
captively by exempted units under Area Based Exemption Scheme in Himachal
Pradesh and Uttarakhand.